Answer:
Cook Co.
Net Income
d) $908,600
Explanation:
a) Data and Calculations:
Cook Co. Information for the current year:
Materials inventory, Jan 1 Â Â 120,000
Materials purchased      980,000 Â
Materials inventory, Dec 31 Â 86,000
Materials used          1,014,000
Work-in-process, Jan 1 Â Â Â Â 30,000
Materials used          1,014,000
Direct labor             680,000
Total overhead costs     408,000
Work-in-process, Dec 31 Â (20,000 )
Cost of production    $2,112,000
Finished Goods, Jan 1 Â Â Â 210,000
Cost of production     2,112,000
Finished Goods, Dec 31 (400,000 )
Cost of Goods Sold   $1,922,000
Manufacturing overhead costs:
Saper Sandpaper           $ 17,000
Machine helpers’ salaries     86,000
Small tools                100,000 Â
Leasing costs, plant         120,000
Depreciation, plant          70,000
Property taxes, plant         10,000
Insurance, factory equipment  5,000
Total overhead costs      $408,000
Sales Commissions        200,000
Sales salaries              180,000
Advertising costs           150,000
Office administration costs  250,000
Total expenses           $780,000
Sales               4,000,000
Cost of Goods Sold   $1,922,000
Gross profit         $2,078,000
Less expenses         780,000
Profit before tax       1,298,000
Income Tax (30%) Â Â Â Â Â 389,400
Net Income          $908,000
